Amazon expands its perishable delivery service, putting pressure on traditional grocers
By ANNE D'INNOCENZIO
Amazon is now rolling out a service where its Prime members can order their blueberries and milk at the same time as basic items like batteries and T-shirts and get them within hours.
The online juggernaut said Wednesday that customers in more than 1,000 cities and towns including Raleigh, North Carolina; Milwaukee; and Columbus, Ohio, now have access to fresh groceries with its free same-day delivery service on orders over $25 for Prime members, with plans to reach over 2,300 cities and towns by year-end.
Amazon called the move 'one of the most significant grocery expansions' for the online retailer as it introduces thousands of perishable items into its existing logistics network. The expansion is expected to put pressure on grocery delivery services offered by such rivals as Walmart, Kroger and Target, which all saw their shares take a hit in trading Wednesday.
Amazon's shares rose 1%.
Amazon said that if an order doesn't meet the minimum, members can still choose same-day delivery for a $2.99 fee. For customers without a Prime membership, the service is available with a $12.99 fee, regardless of order size.
In the past, Prime subscribers' grocery orders were fulfilled through Amazon Fresh or Whole Foods Market.
Prime members pay $14.99 monthly or $139 annually.
Amazon launched its Prime membership in 2005, and it has become the gold standard for subscription services with a slew of perks including unlimited streaming with Prime Video and discounts at Whole Foods and Amazon Fresh. Walmart, which launched its membership program called Walmart + in 2020, has been racing to add more benefits. It costs $12.95 per month or $98 per year. Depending on members' location and availability, Walmart members can schedule same-day delivery for their groceries, including perishables.
'We're continuously innovating to make grocery shopping simpler, faster, and more affordable for our customers, especially Prime members,' said Doug Herrington, CEO of Worldwide Amazon Stores, in a statement. 'By introducing fresh groceries into our Same-Day Delivery service, we're creating a quick and easy experience for customers. '
Herrington noted that customers can order milk alongside electronics; oranges, apples, and potatoes with a mystery novel; and frozen pizza at the same time as tools for their next home improvement project—and check out with one cart and have everything delivered to their doorstep within hours.
The company first tested the service in Phoenix, last year, and then added Orlando, Florida and Kansas City, Missouri, earlier this year.
Amazon noted that many of its customers were first-time Amazon grocery shoppers who now return to shop twice as often with the same-day deliver service compared to those who didn't purchase food. It also noted that based on early sales, strawberries now regularly knock AirPods out of the top five best sellers of all products sold, while bananas, Honeycrisp apples, limes, and avocados round out the top ten best-selling perishable grocery items in their same-day delivery carts.
'It's a nice step forward,' said Jason Goldberg, chief commerce strategy officer at Publicis Groupe, a global marketing and communications company. 'It definitely makes them more competitive" in perishables.
Goldberg noted that Amazon has struggled to succeed in fresh food and that shoppers have been confused ordering shelf stable items and perishables, and having them appear in different online shopping carts, including Amazon Fresh. He said this move will greatly improve the experience.
Amazon said it generated over $100 billion in gross sales of groceries and household essentials last year not including sales from Whole Foods Market and Amazon Fresh.
In June, Amazon said it was investing more than $4 billion to triple the size of its delivery network by 2026, with a focus on small towns and rural communities across the country.
It also noted that it's using artificial intelligence to help it predict local customer preferences so it can stock popular items alongside items targeted for specific communities
© Copyright 2025 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Japan Today
a day ago
- Japan Today
Retail sales in U.S. rise a solid 0.5% in July from June as shoppers appear to shrug off tariff pressures
By ANNE D'INNOCENZIO Shoppers spent at a healthy pace in July, particularly at the nation's auto dealerships, as they appear to shrug off President Donald Trump's tariffs, which are starting to take a toll on jobs and lead to some price increases. Retail sales rose a solid 0.5% last month, and June spending was stronger than expected, according to the Commerce Department's report released Friday. June's retail sales were revised upward to 0.9%, from a 0.6% increase, the agency said. The pace in July matched economists' estimates. The increases followed two consecutive months of spending declines — a 0.1% pullback in April and a 0.9% slowdown in May. Excluding auto sales, which have been volatile since Trump imposed tariffs on many foreign-made cares, retail sales rose 0.3% in July. Auto sales rose 1.6%. They appear to have returned roughly to normalized spending after a surge in March and April as Americans attempted to get ahead of Trump's 25% duty on imported cars and parts and then a slump after that, according to Samuel Tombs, chief U.S. Economist at Pantheon Macroeconomics. The data showed solid spending across many retail sectors. Business at clothing stores was up 0.7% while online retailers saw a 0.8% increase. Business at home furnishings and furniture stores rose 1.4%. However, at electronics stores, sales were down 0.6%. And business at restaurants, the lone services component within the Census Bureau report and a barometer of discretionary spending, fell 0.4%, however as shoppers are focusing on eating at home to save money. A category of sales that excludes volatile sectors such as gas, cars, and restaurants rose last month by 0.5% from the previous month. The figure feeds into the Bureau of Economic Analysis's consumption estimate and is sign that consumers are still spending on some discretionary items July's spending likely got a boost from Amazon's Prime Day sales and competing online sales at Target, Walmart and other retailers, analysts said. 'Consumers have a little more spring in their step,' said Christopher S. Rupkey, chief economist at FWDBonds LLC, a financial markets research firm. 'Whether this is simply whistling in the dark, time will tell, but the tariff headline chaos did not keep consumers at home in July with the one caveat that they reduced their dining out spending. Retail sales do not give the economy a complete bill of health, but at least the consumer is not in headlong retreat.' But Rupkey noted that time will tell how consumers will react when they see higher prices on goods in shops in the mall in the months to come. Tariffs are starting to take a toll in other parts of the economy. Earlier this month, the Labor Department reported that U.S. hiring is slowing sharply as Trump's trade policies paralyze businesses and raise concerns about the outlook for the world's largest economy. U.S. employers added just 73,000 jobs last month, the Labor Department reported, well short of the 115,000 expected. Another government report, issued Tuesday, on U.S. inflation showed that inflation was unchanged in July as rising prices for some imported goods were offset by declining gas and grocery prices, leaving overall prices modestly higher than a year ago. Consumer prices rose 2.7% in July from a year earlier, the same as the previous month and up from a post-pandemic low of 2.3% in April. Excluding the volatile food and energy categories, core prices rose 3.1%, up from 2.9% in June. Both figures are above the Federal Reserve's 2% target. On a monthly basis, prices rose 0.2% in July, down from 0.3% the previous month, while core prices ticked up 0.3%, a bit faster than the 0.2% in June. The new numbers suggest that slowing rent increases and cheaper gas are offsetting some impacts of Trump's sweeping tariffs. Many businesses are also likely still absorbing much of the cost of the duties. The consumer price figures likely reflect some impact from the 10% universal tariff Trump imposed in April, as well as higher duties on countries such as China and Canada. But that may change. U.S. wholesale inflation soared unexpectedly last month, signaling that Trump's taxes are pushing costs up and that higher prices for consumers may be on the way. The Labor Department reported Thursday that its producer price index — which measures inflation before it hits consumers— rose 0.9% last month from June, biggest jump in more than three years. Compared with a year earlier, wholesale prices rose 3.3%. The figures were much higher than economists had expected. The report comes as major retailers like Walmart and Target are slated to report their fiscal second-quarter earnings reports starting next week. Analysts will stud the reports to see how much retailers are absorbing the costs and how much they're passing on to shoppers. They'll also want to get insight into the state of consumer behavior heading into the critical fall and winter holiday seasons. In May, Walmart, the nation's largest retailer, warned t hat it had increased prices on bananas imported from Costa Rica from 50 cents per pound to 54 cents, but it noted that a large sting for shoppers wouldn't start to appear until June and July. The retailer's chief financial officer, John David Rainey, told The Associated Press that he thought car seats made in China that were selling for $350 at Walmart would likely cost customers another $100. But a growing list of companies including Procter & Gamble, Cosmetics, Black & Decker and Ralph Lauren told investors in recent weeks that they plan to or have already raised prices. Some, like eyewear retailer Warby Parker, are trying to be selective and are trying to focus on raising prices on just their premium products as a way to offset the higher costs from tariffs. Warby Parker told analysts last Thursday that it plans to keep its $95 option. But it's increasing prices on select lens types. It also wants to cater more to older shoppers who need more expensive progressive lens. Warby Parker said that progressives, trifocals and bifocals make up roughly 40% of all prescription units sold industrywide. But just 23% of Warby Parker's business now is made up of progressives. Company executives said progressives are its highest priced offering and offer the highest profit margins. 'We were able to quickly roll out select strategic price increases that have benefited our growth,' Neil Blumenthal, co-chairman and co-founder and co-CEO of Warby Parker, told analysts last week. © Copyright 2025 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.
Japan Today
3 days ago
- Japan Today
Amazon expands its perishable delivery service, putting pressure on traditional grocers
FILE - An Amazon Prime logo appears on the side of a delivery van as it departs an Amazon Warehouse location in Dedham, Mass., Oct. 1, 2020. (AP Photo/Steven Senne, File) By ANNE D'INNOCENZIO Amazon is now rolling out a service where its Prime members can order their blueberries and milk at the same time as basic items like batteries and T-shirts and get them within hours. The online juggernaut said Wednesday that customers in more than 1,000 cities and towns including Raleigh, North Carolina; Milwaukee; and Columbus, Ohio, now have access to fresh groceries with its free same-day delivery service on orders over $25 for Prime members, with plans to reach over 2,300 cities and towns by year-end. Amazon called the move 'one of the most significant grocery expansions' for the online retailer as it introduces thousands of perishable items into its existing logistics network. The expansion is expected to put pressure on grocery delivery services offered by such rivals as Walmart, Kroger and Target, which all saw their shares take a hit in trading Wednesday. Amazon's shares rose 1%. Amazon said that if an order doesn't meet the minimum, members can still choose same-day delivery for a $2.99 fee. For customers without a Prime membership, the service is available with a $12.99 fee, regardless of order size. In the past, Prime subscribers' grocery orders were fulfilled through Amazon Fresh or Whole Foods Market. Prime members pay $14.99 monthly or $139 annually. Amazon launched its Prime membership in 2005, and it has become the gold standard for subscription services with a slew of perks including unlimited streaming with Prime Video and discounts at Whole Foods and Amazon Fresh. Walmart, which launched its membership program called Walmart + in 2020, has been racing to add more benefits. It costs $12.95 per month or $98 per year. Depending on members' location and availability, Walmart members can schedule same-day delivery for their groceries, including perishables. 'We're continuously innovating to make grocery shopping simpler, faster, and more affordable for our customers, especially Prime members,' said Doug Herrington, CEO of Worldwide Amazon Stores, in a statement. 'By introducing fresh groceries into our Same-Day Delivery service, we're creating a quick and easy experience for customers. ' Herrington noted that customers can order milk alongside electronics; oranges, apples, and potatoes with a mystery novel; and frozen pizza at the same time as tools for their next home improvement project—and check out with one cart and have everything delivered to their doorstep within hours. The company first tested the service in Phoenix, last year, and then added Orlando, Florida and Kansas City, Missouri, earlier this year. Amazon noted that many of its customers were first-time Amazon grocery shoppers who now return to shop twice as often with the same-day deliver service compared to those who didn't purchase food. It also noted that based on early sales, strawberries now regularly knock AirPods out of the top five best sellers of all products sold, while bananas, Honeycrisp apples, limes, and avocados round out the top ten best-selling perishable grocery items in their same-day delivery carts. 'It's a nice step forward,' said Jason Goldberg, chief commerce strategy officer at Publicis Groupe, a global marketing and communications company. 'It definitely makes them more competitive" in perishables. Goldberg noted that Amazon has struggled to succeed in fresh food and that shoppers have been confused ordering shelf stable items and perishables, and having them appear in different online shopping carts, including Amazon Fresh. He said this move will greatly improve the experience. Amazon said it generated over $100 billion in gross sales of groceries and household essentials last year not including sales from Whole Foods Market and Amazon Fresh. In June, Amazon said it was investing more than $4 billion to triple the size of its delivery network by 2026, with a focus on small towns and rural communities across the country. It also noted that it's using artificial intelligence to help it predict local customer preferences so it can stock popular items alongside items targeted for specific communities © Copyright 2025 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.
Kyodo News
4 days ago
- Kyodo News
Delivery drones may soon take off in the US. Here's why
Delivery drones are so fast they can zip a pint of ice cream to a customer's driveway before it melts. Yet the long-promised technology has been slow to take off in the United States. More than six years after the Federal Aviation Administration approved commercial home deliveries with drones, the service mostly has been confined to a few suburbs and rural areas. That could soon change. The FAA proposed a new rule last week that would make it easier for companies to fly drones outside of an operator's line of sight and therefore over longer distances. A handful of companies do that now, but they had to obtain waivers and certification as an air carrier to deliver packages. While the rule is intended to streamline the process, authorized retailers and drone companies that have tested fulfilling orders from the sky say they plan to make drone-based deliveries available to millions more U.S. households. Walmart's multistate expansion Walmart and Wing, a drone company owned by Google parent Alphabet, currently provide deliveries from 18 Walmart stores in the Dallas area. By next summer, they expect to expand to 100 Walmart stores in Atlanta; Charlotte, North Carolina; Houston; and Orlando and Tampa, Florida. After launching its Prime Air delivery service in College Station, Texas, in late 2022, Amazon received FAA permission last year to operate autonomous drones that fly beyond a pilot's line of sight. The e-commerce company has since expand its drone delivery program to suburban Phoenix and has plans to offer the service in Dallas, San Antonio, Texas, and Kansas City. The concept of drone delivery has been around for well over a decade. Drone maker Zipline, which works with Walmart in Arkansas and the Dallas-Fort Worth area, began making deliveries to hospitals in Rwanda in 2016. Israel-based Flytrex, one of the drone companies DoorDash works with to carry out orders, launched drone delivery to households in Iceland in 2017. But Wing CEO Adam Woodworth said drone delivery has been in 'treading water mode' in the U.S. for years, with service providers afraid to scale up because the regulatory framework wasn't in place. 'You want to be at the right moment where there's an overlap between the customer demand, the partner demand, the technical readiness and the regulatory readiness,' Woodworth said. 'I think that we're reaching that planetary alignment right now.' Flying ice cream and eggs DoorDash, which works with both Wing and Flytrex, tested drone drop-offs in rural Virginia and greater Dallas before announcing an expansion into Charlotte. Getting takeout food this way may sound futuristic, but it's starting to feel normal in suburban Brisbane, Australia, where DoorDash has employed delivery drones for several years, said Harrison Shih, who leads the company's drone program. 'It comes so fast and it's something flying into your neighborhood, but it really does seem like part of everyday life,' Shih said. Even though delivery drones are still considered novel, the cargo they carry can be pretty mundane. Walmart said the top items from the more than 150,000 drone deliveries the nation's largest retailer has completed since 2021 include ice cream, eggs and Reese's Peanut Butter Cups. Unlike traditional delivery, where one driver may have a truck full of packages, drones generally deliver one small order at a time. Wing's drones can carry packages weighing up to 2.5 pounds. They can travel up to 12 miles round trip. One pilot can oversee up to 32 drones. Zipline has a drone that can carry up to 4 pounds and fly 120 miles round trip. Some drones, like Amazon's, can carry heavier packages. Once an order is placed, it's packaged for flight and attached to a drone at a launch site. The drone automatically finds a route that avoids obstacles. A pilot observes as the aircraft flies to its destinations and lowers its cargo to the ground with retractable cords. Risks and rewards of commercial drones Shakiba Enayati, an assistant professor of supply chain and analytics at the University of Missouri, St. Louis, researches ways that drones could speed the delivery of critical health supplies like donated organs and blood samples. The unmanned aircraft offer some advantages as a transport method, such as reduced emissions and improved access to goods for rural residents, Enayati said. But she also sees plenty of obstacles. Right now, it costs around $13.50 per delivery to carry a package by drone versus $2 for a traditional vehicle, Enayati said. Drones need well-trained employees to oversee them and can have a hard time in certain weather. Drones also can have mid-air collisions or tumble from the sky. But people have accepted the risk of road accidents because they know the advantages of driving, Enayati said. She thinks the same thing could happen with drones, especially as improved technology reduces the chance for errors. Woodworth added that U.S. airspace is tightly controlled, and companies need to demonstrate to the FAA that their drones are safe and reliable before they are cleared to fly. Even under the proposed new rules, the FAA would set detailed requirements for drone operators. 'That's why it takes so long to build a business in the space. But I think it leads to everybody fundamentally building higher quality things,' Woodworth said. Others worry that drones may potentially replace human delivery drivers. Shih thinks that's unlikely. One of DoorDash's most popular items is 24-packs of water, Shih said, which aren't realistic for existing drones to ferry. 'I believe that drone delivery can be fairly ubiquitous and can cover a lot of things. We just don't think its probable today that it'll carry a 40-pound bag of dog food to you," Shih said. The view from the ground in Texas DoorDash said that in the areas where it offers drone deliveries, orders requiring the services of human delivery drivers also increase. That's been the experience of John Kim, the owner of PurePoke restaurant in Frisco, Texas. Kim signed on to offer drone deliveries through DoorDash last year. He doesn't know what percentage of his DoorDash customers are choosing the service instead of regular delivery, but his overall DoorDash orders are up 15% this year. Kim said he's heard no complaints from drone delivery customers. 'It's very stable, maybe even better than some of the drivers that toss it in the back with all the other orders,' Kim said. For some, drones can simply be a nuisance. When the FAA asked for public comments on Amazon's request to expand deliveries in College Station, numerous residents expressed concern that drones with cameras violated their privacy. Amazon says its drones use cameras and sensors to navigate and avoid obstacles but may record overhead videos of people while completing a delivery. Other residents complained about noise. 'It sounds like a giant nagging mosquito,' one respondent wrote. Amazon has since released a quieter drone. But others love the service. Janet Toth of Frisco, Texas, said she saw drone deliveries in Korea years ago and wondered why the U.S. didn't have them. So she was thrilled when DoorDash began providing drone delivery in her neighborhood. Toth now orders drone delivery a few times a month. Her 9-year-old daughter Julep said friends often come over to watch the drone. 'I love to go outside, wave at the drone, say 'Thank you' and get the food,' Julep Toth said. ___ AP Video Journalist Kendria LaFleur contributed from Frisco, Texas.
